Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1887-09-12
THEB. 60. SITUATION.
A PRETTY ACCURATE SUMMARY OF THE
RAILROAD DEAL
How It Came About is Effects on The Roads
Finances, Ee.-Ths B. & 0. and the
Railway POOl-"BradSrses'
Leader on the Subject

Ohio situation that has yet been given:
The position of the Baltimore & Ohio
Railroad Company for some time past has
been one which would largely Justify the
importance attached both in and out of
Wall street to the latest Developments in
connection with its affairs. While there
may besome exaggeratiOn in ascribing to the
transaction an influence in relation to finan-
cial and railroad interests equalled only by
that of the memorable West Shore settle
mem, tbs easily recognized that the arrange
ment by which a syndicate ofeminent bank
ing houses extend q measure of financial
assistance to the corporation embodies in
its possibilities, no less than its expressed
terms, so far as made public, consequences
Of the highest Importance in many dircc-
lions. To the company itself it restores
credit which undue autagonism and i'll
Judged expansion had affected somewhat
unfayorably; and, ON the other hand, it
holds out the immediate prospect of q
practical uniformity in the methods of all
in its policy aud management aud abandon
ment of the construction OF unnecessary
parallel lines are to bring itintO harmony
with its most Immediate competitors.
Outside of this it is the presumption that
the outside enterprises which the COM
pany conducted and which involved il
in conflict with other important interests
are being severed from the organization.
One of these, indeed, the express business
of the company, has already passed into
other hands, and though it may be perhaps
premature, there is q general expectation
that the most important OF its auxiliary en-
terprises Baltimore and Ohio telegraph
system-will pass under the control of the
Western Union Compady.
The developments OF the past two years
in regard to the Baltimore and Ohio have,
il must be admitted, been of q somewhat
surprising character. The company was
not only one of the oldest railroad corpora
tious in the country, but was naturally re-
garded as one of the most solvent and con-
servative. 1t was regarded with peculiar
local pride BY the city of Baltimore and
the State Of Maryland, both Of which are
large stockholders IN the company, and
LOYALTY tC their interests has been dis
tinguished feature OF its policy to an ex-
tent apparently involving neglect of con.
sideratiOns dominating the commercial
and railroad situation. Under the man
agement Of Mr.. John W. Garrett,
who, as President and owner of Il
practically controlling interest, was the
virtual dictator of its policy, the COM
pany, free as it was from fagrant stock
watering, attained an elevated credit and
a prosperity which maintained high divi-
dend rate, and while its bonded debt grew
with the acquisition of new lines its share
capital was not materially increased. At
the same time the accumulation Of sur
plus account, which though il now seems
somewhat misleading in character, being
in large degree bookkeeping fiction,
amounts at the present time To some Sl4,-
OOO. 600, seemed a visible indication OF the
strength of the concern.
The distinguishing feature of its man
agement was, however, the assertion Of
complete independence of rival interests
and q disregard of the tendency toward
greater harmony in the conduct OF COM
petitiye railroad traffic which, more than
anything else, seems to have been prOduc-
tive of the conditions now existing in con-
nection with its affairs. Under Mr.. John
W. Garrett the company was frequently a
disturbing element in the trunk-line pools,
and his death and the accession to the
presidency of his son, Mr.. Robert Garrett,
by no means diminished the aggressive
element in its policy. It's entrance into
the field OF telegraphy and the formation
of an extended system of wires IN COM
petition with the Western Union brought
it into direct antagonism with that
concern and the powerful interest which
controls it, while similar independent or
carnations in its express or sleeping-car
husine=. antagonized the special interests
identified with those departments OF trans
portation. At the same time its rela-
tions with its most immediate eompet-
tor, the Pennsylvania Railroad, became
only more strained. 1t was resolved TO
obtain an entrance to New York inde-
pendent of the latter, and the con-
struction of road between Baltimore
and Philadelphia was undertaken parallel
ing the road controlled by the Pennsyl
yania. An ostensible alliance was formed
with the Reading, which was to afford it
access over its own and the Jersey Cen
tral lines from Philadelphia to Staten
Island, which was to berOme the New
York passenger and freight terminus OF the
road. The Immediate result of this plan
was the loss by the Baltimore and Ohio
of the facilities which it till then enjoyed
for reaching New York over the Pennsyl-
vsnia's lines from Baltimore, thus shut
ting il out from New IOrS for the time,
and leading to the refusal on the part OF
the Baltimore and Ohio TO fully enter
the reorganization of the trunk line
pool which followed the West Shore settlt-
ment. In the two years since that time
the Philadelphia extension has been conf
pleted, but without direct advantage TO
the company, "a the line itself is not
thought to be profitable. The expected
beneSts of the alliance with the Reading
have beel SItOgether nulliied by the fact
that that PrspeItg as well as the
Jersey Central has F1s-4d into the
hands OF an interest which CoGS4deEg
the maintenance OF harmonious relations
with the Pennsylvania is OF more impor-
taucs than the Baltimore and Ohio's
through business could be. These
companies. therefore seSliped to
accord the use Of their hLeS,
so that the Baltimore and Ohio having
built road to Philadelphia, increasing its
bonded deb, SIS. 5.OOO, 900 thereby and ac-
cumulating q fOating debt in the neigh
borhOOd OF 10000, 600, iuds its further
progress barred save by the ruiAous expe-
dent OF constructing another parallel line
to Staten Island, involving tine practical
abandonment of the most costly portion of
its line 80 Philadelphia. The position OF
the company materially became ditti-
cult one. Further financial aSsisr ance
for prosecuting its plans or relieT-
ing its necessities could be obtained
only through channels which were
connected with the many interests 1t had
antagonixed, or were interested in the
avoidance of the eQAtisrsd competition
whieh its policy seemed to inyolys. At
the same time the development Of desire
on the part of Mr.. Garrett TO relieve bim-
aslf OF the cares of active railroad msn-
asaz,sut and his efforts to effect q sale OF